The balance sheet at the end of the first year of operations indicates the following:

-Refer to Exhibit 14-2. What is the debt ratio for 2012 (rounded to one decimal places)?

Question

The balance sheet at the end of the first year of operations indicates the following:
 
-Refer to Exhibit 14-2. What is the debt ratio for 2012 (rounded to one decimal places)?

Quizplus · Accepted Answer

The debt ratio is calculated by dividing total debt by total assets. In 2012, total debt was $1,000 and total assets were $2,600. Therefore, the debt ratio for 2012 is $1,000 / $2,600 = 38.5%, which rounds to 37.9%.

The Balance Sheet at the End of the First Year